Teck operating profit lifted by coal segment
By Euan Rocha
(Reuters) - Teck Resources Ltd's TCKb.TO TCK.N quarterly operating profit rose 13 percent on strong coal pricing and shipments, and the miner said it expected coal prices to rise again, sending its shares up more than 3 percent on Tuesday.
Teck, one of the world's top producers of coal used for making steel, said supply disruptions in Australia and rising global demand have put the company in a strong position, as it has large coal stockpiles ready for shipment.
"We have come through a weak point in the global steel production cycle, and we certainly see the market improving now," Chief Executive Don Lindsay said on a conference call.
"It is true we have had a couple of quarters where we have produced more than we've sold," said Lindsay. "But it wouldn't surprise me if this quarter we sell more than we produce - that's how it's unfolding right now."
The favorable outlook, coupled with a lower-than-expected forecast for capital costs at an important mining project, pushed its shares higher in both Toronto and New York.
The stock rose even though Teck's first-quarter earnings fell short of some expectations due to higher than expected copper production costs.
In its sanguine outlook for coal, Teck echoed its larger rival Rio Tinto (RIO.L: Quote) (RIO.AX: Quote), which last week told investors that it saw Chinese demand for commodities staying robust while U.S. demand recovers.
Even so Teck cautioned that markets for its products, which also include copper, lead and zinc remain volatile on persistent uncertainty over economic conditions in Europe. Continued...